Final answer:
The U.S. specializes in airplane production to increase economic growth and productivity via comparative advantage, which includes the division of labor leading to learning, innovation, and unique skills, and benefiting from economies of scale.
Step-by-step explanation:
The United States decides to specialize in the production of airplanes following the principle of comparative advantage. This decision is primarily driven by the goal to increase economic growth and productivity. Specialization allows the United States to focus on industries where it has a comparative advantage, which means that it can produce goods more efficiently and at a lower opportunity cost than other countries. This focus on specialization is supported by two key economic benefits: (1) The division of labor leads to learning, innovation, and unique skills; and (2) economies of scale. As a result, workers become more skilled and productive in their specific tasks, which can lead to enhanced innovation and ultimately the growth of the industry. Furthermore, specializing and producing a large volume of a particular good often results in lower per-unit costs, known as economies of scale.
High-income economies like the United States, the European Union, and Japan engage in intra-industry trade despite having workers with fairly similar skills. They trade products like cars, computers, and machinery. Each country develops unique and different skills by focusing on specific and particular products, even within the same industry. This differentiation is due to the unique paths of learning and innovation that result from specialization, as well as from geographical and educational differences that influence what kind of goods are more effectively produced in each location.